Carl Icahn, billionaire investor activist, revealed that he possess 8.5 percent shares of Hertz Global Holdings, Inc. (NYSE:HTZ) and might push the company’s management over operational failures and accounting mistakes.
According to the most recent SEC filings of Icahn Capital, Carl owns 38.8 million shares of Hertz Global Holdings, Inc. (NYSE:HTZ). As per the current market price, these shares are worth nearly $1.2 billion. Moreover, the news of Carl Icahn having a big stake in company probably pushed the stock price up in yesterday’s trading. Icahn may demand a seat in the board of directors, something that he has often done in past.
Earlier, Hertz Global Holdings, Inc. (NYSE:HTZ) said that the company is expecting its earning guidance to come considerably low for fiscal 2014. It may fall below its earlier estimates of $1.70 to $2.00 per share for the fiscal. Some additional factors that are hurting the company include accounting errors worth $46.3 million during 2011 and 2013 and most importantly, the lead independent director of the company is leaving the board. Hertz Global Holdings has a market cap of $14.13 billion and its shares trade at $30.33 with P/E ratio of 40.64.
The company told investors that the primary reason for lowered earning guidance is the huge car recalls in 2014 (mainly General Motors Company (NYSE:GM)). A soft demand of its equipment rental section is another reason for lowered guidance. Hertz Global Holdings, Inc. (NYSE:HTZ) has been careful about investor activists and the company devised a poison with a threshold of 10%. There are speculations that Icahn has been working to build a position in Hertz Global for past several months.
This article is written by Prakash Pandey.